Dye: Capacity study ?focused on solutions?

Dye: Capacity study æfocused on solutionsÆ    Federal Maritime Commissioner Rebecca Dye, head of the agency's recent fact-finding investigation into shortages of ship capacity and containers in 2009 and 2010, said the FMC's decision to rely heavily on confidential interviews with shippers and carriers reflected both the limits on the agency's powers, and the desire to quickly develop solutions for shippers.
   Last week, the National Industrial Transportation League, the nation's largest shipper organization, criticized the limited amount of information FMC released about the study.
   'When the reports about the extreme disruptions in supply and inland capacity came to our attention, we sat down and assessed all of the tools that we had to deal with a situation like this,' said Dye in an interview on Tuesday.

Dye

   Noting that about 99 percent of liner cargo volume moves under contracts, she said the FMC looked at 'the prohibited acts and the other sorts of statutory provisions that we would consider enforcing in a situation like this, and we quickly ran right into the provision that under the Shipping Act, the exclusive remedy for breach of contract is in the courts.
   'So, what to do? We decided to start a non-adjudicatory fact finding to assess the entire situation,' she said.
   Since the agency was not pursuing violations of law, it did not use depositions or subpoenas as it would in building a legal case, but cast a wide net, interviewing as many participants as possible, and offering them a pledge of confidentiality.
   Dye said she chose this approach because it 'is a very different type of inquiry and focus. From the beginning I was focused on solutions.'
   'We wanted to do whatever we could as quickly as we could to make it better. We also want to make it better in the long run,' she said. But the paucity of information released to date about the study has frustrated groups like the NIT League, which said a summary of the report last week 'failed to include any reference to the findings made during the investigation and is conclusory. The commission also failed to include any analysis of the facts gained in 170 interviews with market participants under the relevant statute that it administers.'

Carlton

   Bruce Carlton, president of the league, said it may seek release of the report under the Freedom of Information Act 'with all appropriate redactions to protect the identities of those interviewed.'
   Dye noted that as a result of the investigation the agency stepped up its monitoring of discussion agreements in the transpacific trade, both the Transpacific Stabilization Agreement and Westbound Transpacific Stabilization Agreement, requiring the groups to submit verbatim transcripts, to make sure they are not exceeding the limits on the antitrust immunity enjoyed by carriers.
   She also said FMC staff is developing proposals to increase monitoring of the major shipping alliances — the Grand Alliance (Hapag-Lloyd, NYK and OOCL), New World Alliance (APL, Hyundai and MOL), and CKYH alliance (COSCO, 'K' Line, Yang Ming and Hanjin).
   The FMC has stepped up efforts to help shippers and carriers mediate disputes, setting up 'rapid response teams' to deal with shipper complaints.
   While the process 'won't be adaptable for everybody's problem,' she said, 'we have gotten a great response.
   'Just this Friday night I got an e-mail from a very satisfied exporter who was able to resolve a dispute and got a sale to go through.'
   She said ocean carriers have named 'partners' to help the FMC resolve disputes in the rapid response process, high-ranking executives who can help resolve disputes.
   'Some said, 'what if we're overrun?' And I said that would be great, we'll cross that bridge when we come to it.'
   Dye rejected Carlton's interpretation that the FMC 'appears to have concluded that these problems were simply a misunderstanding between carriers and their customers over their respective contractual obligations.'
   'I would never want it to be said that we believed that this was just all a terrible misunderstanding,' Dye said. 'Certainly it was a terrible situation for our importers and exporters, there is no question and we did not take that lightly for a minute.
   'Fortunately the carriers brought back capacity and got back to doing business, but we did observe that there was a terrible disruption and there was some customer service type behavior that nobody — not the FMC, not the carriers themselves, not the customers, certainly — thought was good,' she said.
   But in some of the practices, such as shippers complaining that carriers 'rolled cargo' to a later sailing, Dye said the FMC came to the conclusion it did not have statutory authority to take legal action.
   While she did not closely analyze shipping reform legislation introduced this fall by Rep. James Oberstar, D-Minn., Dye believed some provisions in his legislation would have give the FMC the authority to deal with those sorts of situations.
   But whether or not the FMC is given different powers was 'not my business,' she added.
   'My approach in this investigation has been to be an honest broker and I made it very plain that I would not become involved in the overarching politics involved in the repeal of antitrust immunity,' she said. ' Depending on your perspective you may have liked that or not.' ' Chris Dupin